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Mideast oil giants 'eye Indonesia refinery deals'

Kuwait, April 17, 2011

Top Middle Eastern oil producing countries have expressed interest in participating in two proposed new oil refineries in Indonesia, the country's energy minister said.

Indonesia has received expressions of interest in the projects from Saudi Arabia, Kuwait, Iran and Iraq, Darwin Saleh told Reuters.   

"We are going to build and open our doors to investors to build more refineries," Saleh said. "Gulf countries can contribute in two ways; with funds -- it's a lucrative business to invest in an industrial complex that is not just a refinery --  and they may contribute in crude for these refineries."    

A former Opec member, Indonesia is now a net importer of oil and its growing domestic fuel demand has made it into one of Asia's top oil products buyers.

The government said last year Kuwait's state oil company KPC would study building a new 300,000 barrels per day (bpd) refinery on Java island at a cost of up to $9 billion.

Indonesia has indicated a willingness to offer tax concessions to stimulate foreign investment.

The country's fuel subsidies pose a barrier to commerical investment in new oil refineries. The government had proposed cuts to the subsidies earlier this year but a parliamentary commission approved a delay to the cuts in March amid concerns about the impact of a rapid rise in fuel prices on consumers.   

Saleh said the government was still looking to cut subsidies by targeting aid to poorer people. He declined to give a timeframe for the release of the plan.

Oil production in Indonesia is running almost 30,000 bpd ahead of projections, at nearly 1 million bpd. - Reuters




Tags: Middle East | Oil | Opec | Refinery | Indonesia |

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